Electric Utility Mergers: Industry Concentration and Corporate Complication



Part I

The transactions:
Sales of public franchises for private gain, undisciplined by
competition, producing a concentrated,
complicated industry no one intended

1        Diverse strategies, common purpose: Selling public franchises for private gain
2        Missing from utility merger markets: Competitive discipline
3        The structural result: Concentration and complication no one intended

Part II
The harms:
Economic waste, misallocation of gain, competitive distortion,
customer risks and costs

4        Suboptimal couplings cause economic waste
5        Merging parties divert franchise value from the customers who created it
6        Mergers can distort competition: Market power, anticompetitive conduct, and unearned advantage
7        Hierarchical conflict harms customers


Part III

Regulatory lapses:
Visionlessness, reactivity, deference

8        Regulators' unreadiness:  Checklists instead of visions
9        Promoters' strategy:  Frame mergers as simple, positive, inevitable
10      How do regulators respond? By ceding leadership, underestimating negatives, and accepting minor positives
11      Explanations: Passion gaps and mental shortcuts

Part IV


Regulatory posture, practices,
and infrastructure

12       Regulatory posture and practice: Less instinct, more analysis; less reactivity, more preparation
13      Regulatory infrastructure: Strengthen regulatory resources, clarify statutory powers, assess mergers’ effects